All states need to expand Medicaid: Column

Feb. 23, 2013
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Dr. Martha Perez examines Maria Lebron in a room at the Community Health of South Florida, Doris Ison Health Center on February 21, 2013 in Miami, Florida. Florida Gov. Rick Scott reversed himself on February 20, and now is calling for an expansion of Medicaid to Florida residents under the federal Affordable Care Act. / Joe Raedle Getty Images

by Dhruv Khullar, USA TODAY

by Dhruv Khullar, USA TODAY

This month, Republican Governors Jan Brewer (Ariz.), John Kasich (Ohio) and most recently Rick Scott (Fla.) decided to accept the Medicaid expansion in the Affordable Care Act, bringing billions of dollars of federal funding to their states and ensuring access to medical care for thousands of their most vulnerable citizens.

Republican governors of the more than 15 states still refusing to participate would do well to follow suit.

Ideological and economic arguments aside, giving people health insurance improves health outcomes. A recent study in the New England Journal of Medicine found that states that have substantially expanded Medicaid eligibility since 2000 had better access to care, improved self-reported health and lower death rates for low-income individuals as compared to neighboring states without Medicaid expansions.

A similar on-going study in Oregon -- where the state's Medicaid agency randomly insured 10,000 additional low-income adults -- found that people who got coverage had better mental and physical health and used more preventative services. Both studies build on a considerable body of evidence linking insurance to better health.

A healthy population forms the foundation of a strong economy. By relieving individuals of the constant stress of being uninsured, we allow them to be better workers, parents and community members. States may find that providing health insurance to low-income individuals is one of the most effective ways to keep them working and productive. Good health makes people more capable of paying taxes, loans, mortgages and otherwise contributing to state economies.

Critics observe correctly that while the Medicaid expansion improves health and promotes economic security, it also comes at a substantial cost. Medicaid already accounts for 20% of state budgets, and expanding the program is understandably met with skepticism, especially from conservatives.

But experts estimate that reducing the uninsured population will roughly halve spending on uncompensated care, and that states will save as much as $100 billion between 2014 and 2019 with the expansion. Furthermore, for the first three years the Medicaid expansion is paid for exclusively by the federal government, which will continue to pay at least 90% thereafter.

Gov. Scott -- previously one of the most ardent critics of the ACA -- reversed course at a press conference this week saying that while the federal government is committed to paying for the expansion, he "cannot in good conscience deny Floridians that needed access to health care."

States might have had reason to resist their relatively small but meaningful future contribution before the Supreme Court and 2012 election cemented ObamaCare as the law of the land. But now it just doesn't make sense.

Residents of states that choose not to expand still have to pay federal taxes that cover the expansion in other states. States that don't expand Medicaid, then, are effectively subsidizing other expansions without realizing any benefits for their own citizens. As Gov. Brewer puts it: "Saying 'no' to this plan would not save these federal dollars from being spent or direct them to deficit reduction. â?¦ Arizona's tax dollars would simply be passed to another state â?¦ generating jobs and providing health care for citizens in California, Colorado, Nevada, New Mexico or any other expansion state."

It's not just Gov. Brewer who thinks Medicaid will be an economic stimulus. A study conducted for the North Carolina Department of Health and Human Services found that the Medicaid expansion would bolster the state's economy from 2014 to 2021, resulting in new 23,000 jobs and increasing annual GDP by $1.4 billion. By infusing federal money into local economies to support employment, wages and consumer spending, the Medicaid expansion will be a net economic benefit to states and their residents.

By contrast, states resisting expansion intensify the burden of uncompensated care on hospitals and medical providers, depriving them of necessary revenues. They also perpetuate hidden costs of expensive and inefficient care, which are passed on to middle-class families in the form of higher insurance premiums.

For example, the Center for American Progress estimates that in Florida, the average insured family spends $1,100 of its annual premiums to cover costs of uninsured hospital care, totaling more than $2.3 billion each year. By extending health insurance to 1.3 million uninsured Floridians, Gov. Scott will help relieve families of this burden. Ohio Gov. Kasich, who also recently decided to accept the expansion, argues that it "frees up local funds for better mental health and addiction services, but it also helps prevent increases to health care premiums and potentially devastating impacts to local hospitals."

The recent addition of Governors Brewer, Kasich and Scott to the small gang of Republican leaders opting into the Medicaid expansion may represent a tipping point. For economic, moral and health reasons, let's hope so.

Dhruv Khullar is a student at the Yale School of Medicine and Harvard Kennedy School, where he is a Fellow at the Center for Public Leadership.

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